Skip to main content

Advertisement

Advertisement

Explainer: What caused the pound's slump and will British travel, imports stay cheaper for S'poreans?

Explainer: What caused the pound's slump and will British travel, imports stay cheaper for S'poreans?
The British pound sank to an all-time low of US$1.0327 on Monday (Sept 27), prompting jokes amongst some Singaporeans on social media that this might be a good time to import high-end goods from the United Kingdom.

The sterling has slumped 5 per cent since Thursday and 21 per cent this year against a backdrop of an ever stronger US dollar. It has since bounced back to US$1.0683 at the start of the trading day on Tuesday.

The last time the value of the pound was anywhere near US$1.05 was in February 1985.

So how did the British pound, which was trading close to S$2 against the Singapore dollar just over a year ago, fall so steeply to around S$1.50 on Monday?

TODAY takes a closer look.

WHAT LED TO THE POUND’S POUNDING?

In short, economists told TODAY that it is mainly a result of the market reacting to the new fiscal policies implemented under recently-installed Prime Minister Liz Truss.

Advertisement